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Turner College Economist Speaks to Newsweek Magazine about Falling Diamond Prices

Turner College economist Frank Mixon recently spoke with Newsweek magazine about global diamond prices, which have fallen about 6% this year and are down 30% from three years ago. The conversation centered around the emergence of synthetic or lab-grown diamonds, which Mixon's nephew chose for his engagement in 2023. That these have lower price points, combined with the fact that younger generations seem to be happy to own them, has shifted the global demand for natural stones downward. Another potential element in this story involves vintage (family) diamonds, which Mixon's son, Sparks Mixon, a Turner College alum, recently chose for his engagement. Again, any trending in this direction by younger generations would lead to a reduction in the global demand for natural stones. Uncertainty around tariffs, investor sentiment toward the inclusion of diamonds in portfolios and other changes in consumer behavior are also playing a part in this unfolding story.
     Mixon was contacted by the magazine as a result of having done academic research on diamond prices. For example, a 2014 study in Applied Economics by Mixon, Justin Lee of Piper Jaffray & Company and Steve Caudill of Rhodes College explains that diamonds are generally evaluated on the basis of sensory characteristics, such as carat (weight), color, clarity and cut. However, given the experience goods nature of diamonds, few consumers grasp how the sensory characteristics of these stones are evaluated by the gemological grading laboratories that independently issue diamond reports. The study determines whether diamonds graded by certain gemological laboratories are subject to pricing premiums or discounts in online retail markets. Regression models employing a sample of 169,483 real-time diamond offerings from online diamond retailers (e.g. Blue Nile, James Allen and Adiamor) find significant price discounts attributable to diamonds graded by the European Gemological Laboratory USA in relation to diamonds graded by the Gemological Institute of America (GIA) and significant price premiums attributable to diamonds graded by the American Gem Society in relation to diamonds graded by the GIA.
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